The world of biotech stocks got a new member today. Grail (NASDAQ:GRAL) has successfully completed its spinoff from industry leader Illumina (NASDAQ:ILMN). Previously, Grail had functioned as the company’s cancer-testing unit. However, after regulatory pressure, Illumina, known for its advances in the field of DNA sequencing, opted for the spinoff that would allow Grail to function as its own separate entity. Today, GRAL stock begins trading on the Nasdaq in what could be one of the summer’s hottest market debuts. As InvestorPlace contributor Rich Duprey reports:
“Grail’s early cancer test Galleri holds a lot of promise. It can detect 50 different kinds of cancer early in the process. Early detection is one of the best hopes of beating cancer. Grail is trialing the test with the U.K.’s National Health Service and 140,000 participants. It is expected to be completed by the third quarter. Results from its Pathfinder 2 study are expected in 2025 and Grail anticipates filing for approval from the Food & Drug Administration in the first half of 2026.”
With that in mind, it makes sense that Illumina wanted to hold onto Grail, especially with its recent progress in the cancer testing space. But what else do investors need to know about this exciting new stock? Let’s take a closer look as Grail spins off from Illumina and begins trading.
GRAL Stock: What to Know
- Illumina initially acquired Grail for roughly $8 billion in 2021 after a lengthy buying process. It did so before obtaining approval from antitrust regulators.
- While Grail now functions as an independent entity, Illumina will maintain a 14.5% stake in its former subsidiary.
- The company completed the spinoff by distributing more than 85% of GRAL stock shares to Illumina shareholders. Investors received one Grail share for every Illumina share they owned.
- Illumina opted for the spinoff after EU regulatory agencies forced it to choose between a capital markets transaction or a sale to divest from Grail.
- Grail initially filed for an initial public offering (IPO) in September 2020, raising $2 billion from venture capitalists. At the time, the company had been eyeing a commercial launch for Galleri, its cancer screening test, in 2021.
- Following the acquisition, activist investor Carl Icahn led a proxy battle against Illumina, advocating for its CEO’s removal.
- Newly appointed CEO Jacob Thaysen is optimistic about Illumina’s prospects following the spinoff. He recently stated: “With the completion of the spinoff of GRAIL, we have achieved our goal of divesting GRAIL in a manner that allows its breakthrough technology to continue benefiting patients.”
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
